Good News for First Time Home Buyers

Excerpted from the Canadian Press thru MSN Money
Tax rebate doubled for first time homebuyers

Canadian Press

Keith Leslie

TORONTO - Ontario is doubling the rebate on the land-transfer tax for first-time homebuyers to $4,000, but is increasing the same tax on homes that sell for over $2 million.
The government says half of first-time buyers won't pay any land-transfer tax to the province, while the half-percentage point increase on homes over $2 million will affect less than one per cent of the population.
The province takes in over $2.1 billion a year in the land-transfer tax, and the government says any increase in revenues from the increase on luxury homes will help pay for the doubled rebates for first-time buyers.
Premier Kathleen Wynne had said the government was worried about the difficulty faced by first-time buyers trying to get into the housing market, especially in the Greater Toronto Area where the average price is $762,975.
The government also announced it is freezing the property tax on apartment buildings while it reviews how it affects rental market affordability.
The changes to the land-transfer tax are outlined in the Ontario government's fall economic statement, which says that home ownership has become a key factor in many people's long term financial security.
The Ontario Real Estate Association had asked the government to expand the land-transfer tax rebate program for first-time buyers as one way to help more of them get into the housing market.
The city of Toronto has its own land transfer tax, which offers rebates of up to $3,725 for first time buyers.
Ontario's land-transfer tax rises from half-a-per cent on the first $55,000 of a purchase price to two per cent for everything above $400,000. Toronto's land-transfer tax is one per cent on the first $55,000 and two per cent on the rest.

New Mortgage Rules Came Into Effect October 17, 2016

I've posted several articles recently about this and the bottom line is that all mortgages that has to be insured- those with less than 20% down payment- has to pass something they have called a Stress Test. What it really means is that a buyer's income must be sufficient to carry a mortgage computed at 4.64% for qualification purposes. This makes it all the more important to speak with your Real Estate Agent as Mortgage Brokers are finding ways on how to cope with this new rule which effectively requires 12% to 18% more income than it used to in order to qualify. Read the following article.

Canadian Mortgage Brokers Find Around New Lending Rules

excerpted from The Financial Post

Canada’s new mortgage rules risk pushing borrowers deep into the shadow lending market, with brokers set to line up secondary loans with private lenders as a means of circumventing tests on borrowers’ ability to repay debt.
Canadian officials have become increasingly alarmed by systemic risk from record household debt levels and a frothy housing market. In the latest bid to cool the red hot Vancouver and Toronto markets, Ottawa’s new rules require lenders to stress test borrowers’ ability to pay back loans at levels higher than current rates.
As a way around them, brokers are planning to direct more borrowers to the so-called shadow lending market where private investors, frustrated by low interest rates on savings accounts, are eager to lend at rates that can enter the double digits.

These combined loans take borrowers up to the kind of loan-to-value ratios that were common in the United States prior to the 2008 subprime mortgage crisis.

Canada’s biggest non-prime lender Home Trust is already selling a “bundled” product, twinning a conventional mortgage with a second loan by private lenders, which enables home buyers to borrow up to 85 per cent of a property’s value.

The new rules that took effect on Oct. 17 require buyers applying for an insured mortgage to show they can afford to pay it back at the Bank of Canada’s five-year fixed rate of 4.64 per cent. Canada’s biggest banks currently offer mortgages at rates about two percentage points below that.
To bypass that test, buyers can make a 20 per cent down payment that qualifies them to take out an uninsured mortgage. Brokers said many buyers will turn to unregulated private loans to enable them to make that payment.

Rising costs

“It pushes Canadians into private second mortgages, and it’s just costing more and more money for these people,” said Toronto broker Mark Cashin, who has arranged such deals in the past and expects to see more under the new rules.
Cashin said private second mortgages in Toronto typically charge between 7 and 10 per cent in interest.
“It’s not a good option but maybe it’s the only option we’ve got,” said Ron Alphonso, a private mortgage lender and mortgage agent who arranges home loans for borrowers who can’t get financing from mainstream banks.
Alphonso said he is working on two cases where he’s trying to arrange secondary lending by private investors to enable clients to obtain mortgages.
“It’s a way to get around the new rules,” he said.

Investor pools

As an alternative, he said he is looking to pool together a group of private investors to invest around $50 million offering mortgages to borrowers that don’t pass the new tests at annual rates of between 4 to 6 per cent.
Debt counselors said the rules could have the unintended consequences of allowing aggressive alternative lenders to take a bigger share of the market.
“They are going to turn to these unconventional lenders and pay higher prices and it’s not just going to be a higher price for one year, it could be a higher price for three, four, five years,” said Scott Hannah, chief executive of Canada’s Credit Counseling Society, a charity that advises people on debt.
“They want to get into the market, in some cases at any cost, and the cost is going to be a very high mortgage payment.”
Canada’s finance ministry and Home Trust did not immediately respond to requests for comment.

What Could the Coming Changes to Mortgage Rules Mean to You?

Chart A- shows how Sales behaved in 2016 & the past 3 years

Chart B- shows how Resale Home Prices behaved in 2016 & 3 years past

There are impending changes to mortgage rules that will take effect soon as announced by the Federal government. I have also posted at the right column articles to this effect- scroll down to Real Estate News- Recent Developments.
How this will affect you as a homeowner whether a first time buyer, a move-up seller/buyer, or investor, needs some careful consideration.
Chart A shows the monthly number of sales in the GTA to September last month (see 5-point star) and the past 3 years. From this month (October) to year end you can expect a decline in the number of sales- see downward arrow I placed from its peak in June. It's effect on you will depends on what you aims are real estate wise in the next few months.
Now consider Chart B. It shows the monthly average resale home prices and 3 years before. Note the average prices for September (marked with 5-pt star) which is on the high side if not the highest, yet September is supposed to be the start of the decline in the number of sales as shown in A. I put clouds from October to year end as we do not yet know how prices will behave in the next few months because of these forthcoming changes to mortgage rules.
Whatever your next moves are contact your real estate agent.

Direct from the TREB President himself! Take advantage of what he shares in this hot Housing market!

TREB: Top tips for first-time home buyers

By Larry Cerqua

First posted: Thursday, September 01, 2016 12:14 PM EDT | Updated: Thursday, September 01, 2016 12:19 PM EDT

TREB President

Larry Cerqua.

        

Buying your first home is exciting, but can feel a bit scary.

Owning your home may represent a new chapter in your life and, for most people, it’s the largest investment they’ll ever make. That’s why it’s important to educate yourself on the process and understand your home ownership goals before you start your search. Below are some tips on how to prepare for this milestone.

Things to consider before beginning the process

Before you take the first steps to finding your dream home, sit down and make a list of your long-term goals. Once that’s done, consider how home ownership fits into your plan. Your home ownership goals may be as simple as converting all those rent payments into mortgage payments to create equity or, they may be more complex, such as becoming a landlord.

Be realistic about your “wants” and “needs”

Now that you have a basic understanding of your home ownership goals, a next step might be to make a list of must-haves and a separate list of nice-to-haves. Things to consider could be location, number of bedrooms, property type, yard space, lifestyle, and so on. In the event you have to make some compromises during your house hunting, this list will help keep top of mind what’s important to you and help you stay confident in the moment with your choices.

Also, your Realtor is very knowledgeable when it comes to GTA communities, and what each area offers. Ask your Realtor to help you establish a few alternative community options in the event you need to expand your search area.

Get pre-approved for a mortgage and consider how much you can afford

Crunch the numbers to get a better sense of what your monthly payments will look like. Don’t forget to budget/factor in expenses such as closing costs, movers and furnishings for your new space. Your financial situation now may not be the same in a few years’ time, so it’s important to be realistic about how much home you can afford. Talk to your Realtor, they can help guide you through this process.

Find a Realtor

Now that you have a good picture of your financial situation and home ownership goals, it’s time to choose a Realtor who will help guide you through the process of purchasing your first home. With over 45,000 TREB Professional Member Realtors across the GTA, you should be able to find the perfect one for you! Sit down with a few real estate professionals and select one that has experience with your unique situation and with whom you feel comfortable.

I hope these tips help guide you through the early stages of purchasing your first home.

Talk to a Toronto Real Estate Board Professional Member Realtor. For updates on the real estate market, visit TREBhome.com. If commercial property is what interests you, contact a TREB Commercial Professional Member Realtor by visiting trebcommercial.com.

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• A well maintained building steps away from public transport, shops and fine restaurants
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Reasons to use a Realtor when buying a pre-construction condo!

Excerpted from The Toronto Sun
Pre-construction condos: Should you use a realtor?

Stephen Moranis, Special to Postmedia Network
 

First posted: Tuesday, July 12, 2016 08:00 AM EDT

Should you use a realtor when buying a new pre-construction condo?
The answer for this is a definite YES. Toronto realtor Matt Smith, who specializes in helping buyers navigate through the complicated process of buying new condos, has shared with me the many pitfalls and disadvantages of buyers going it alone when dealing with the builders’ sales staff.
Above all else, realize that the builder’s sales team works for the builder and only the builder. That is where their loyalties lie. They simply have zero interest in protecting you or your rights, or in getting you the best deal or best location within the building. By using your own real estate agent, you get the advantages of comparative shopping as well as their specialized knowledge of these complicated transactions, which can potentially save you both legal and financial problems and surprises down the road. It is important to declare and introduce your realtor with the builder when you register as a client at the new condo site.
Here are twelve ways a realtor can help you through the process:

• Your realtor can gain you access to VIP events. This is where the best prices and floor plans are available for sale. By the time the building goes to public market, often the choice units have been sold with up to 50% of the units being taken before the general public gets to pick any suites. VIP realtor events help you get better suites and prices.
• Your realtor knows how to ask the right questions – and many you don’t know to ask.
• Your realtor can guide you through the important steps during the 10 days of the Cooling Off Period. Skipping these steps can create problems.
• Your realtor can help negotiate the agreement in your best interest. Many things are negotiable and your experienced agent can help you navigate through this process.
• Your realtor has access to MLS. This is important for pricing advice so that you can compare both new and resale properties and be better informed on what is a fair price.
• Your realtor can explain the importance of “The Right To Assign.“ Once the property is constructed there is interim occupancy then there is registration. You as a new buyer may want to assign (sell your rights) your agreement at any time during this lengthy period and you may be just selling your paper. The purchase agreement must spell out the fees and conditions for this privilege so that you know these well in advance. Many builders will deny this right and you should know this before you buy.
• Your realtor understands how to read the building plans. It is important to know where the garbage chute, elevators and stairwells are, as well as your underground parking space, storage locker and additional amenities such as the pool, party room and gym.
• Your realtor has a good general understanding of the neighbourhood and any potential new developments that could restrict your views later on and cause traffic issues.
• Your realtor can help you coordinate all of the closing costs and details with your lawyer.
• Your realtor can explain how the HST will affect your closing costs and can help determine whether you are eligible for any HST rebates on your purchase.
• Your realtor can explain to you how the interim occupancy costs work, and more importantly, how the builder calculates these charges.
• Your realtor can explain with you the changing reality of your monthly condo fees. The builder generally underestimates these fees for a variety of reasons, and you should be aware that the fees that may be quoted can escalate and sometimes very dramatically in the first few years. You probably should budget for increases of somewhere between 10 and 20%, though many actual condo fees have gone up significantly more than that.
• The expert advice of a knowledgeable realtor can save you tens of thousands of dollars on a pre-construction condominium. They can help you negotiate everything from upgrades to a cap on your development closing costs, which can be significantly more than a resale condo. The builder has also built in the fees to the buyer’s agent – in fact, they do not reduce the purchase price if you don’t use one. This transaction has so many nuances and subtleties that it is definitely worthwhile to get the help of an experienced professional.

Stephen Moranis, B.Comm., MBA, FRI, CMR has been active in the North American Real Estate Industry for more than 40 years. He is a former President of the Toronto Real Estate Board and a former Director of the Canadian Real Estate Association.                                                                                                                                                                                             tower in Toronto. (Ernest Doroszuk/Toronto Sun)

File photo of the construction site for the Aura condominium

           

The best argument to buy a home in Canada- It's A Proven Performer!

5 Reasons You Should Buy A Home In 2016

Posted: 02/29/2016 12:43 pm EST Updated: 02/29/2016 12:59 pm EST 

Excerpted from Huffington Post/YPNextHome          

Written by Wayne Karl
Why is 2016 a good year to buy a home in Canada? Let us count the ways.

1. LOW INTEREST RATES
In its latest rate announcement on Jan. 20, the Bank of Canada held its target for the overnight rate at 0.50 per cent, citing a setback brought on by a decline in oil and commodities prices. BoC expects the economy to grow by about 1.5 per cent in 2016 and 2.5 per cent in 2017.
Some experts, such as Benjamin Tal, deputy chief economist at CIBC World Markets, expects interest rates to remain low through 2016, if not fall.
At least one lender, in Ontario, even recently introduced what it says is the lowest posted fixed mortgage rate on the market - at 1.69 per cent for a one-year term.
The BoC's next rate announcement is March 9.
2. THE UPSIDE OF DOWN PRICES
When the The Canadian Real Estate Association (CREA) released its latest statistics on Feb. 16, one number jumped off the page and into the headlines: 17 per cent - the rate by which the national average sale price rose on a year-over-year basis in January.
"Holy," prospective homebuyers might have thought, "how will I ever be able to buy a home if this keeps happening?"
The key thing to look for when you see such news, however, is what's happening in your market. Real estate is local, not national. You don't buy the Canadian market, or even a provincial or regional one. You buy one home in one location.
Excluding British Columbia and Ontario from CREA's January stats, the national average sale price actually declined slightly, by 0.3 per cent.
Economies and housing sectors in markets such as Calgary, Edmonton and Saskatoon are feeling the pinch of the extended slowdown in oil and gas. For existing homeowners, of course, this isn't great news; average home prices in Calgary dropped 3.05 per cent year-over-year in January, and in Saskatoon they fell 2.11 per cent.
For prospective buyers, however, this means opportunity.
Naturally, buyers might not too jazzed about getting in when prices are dropping, fearing their home's value will go down after they purchase. But look at the longer term. In Calgary, prices have increased 14.29 per cent over the last three years; in Saskatoon, 2.07 per cent.

3. THE HOT GETS HOTTER
The Toronto and Vancouver housing markets continue to roll along, hitting record sales and prices. If you live there and you're fortunate enough to be able to buy, particularly in the lowrise home category, the forecasts for 2016 are for more growth.
Again looking at the CREA's stats for January, B.C.'s Lower Mainland and the GTA contributed most to the national increase. Greater Vancouver (20.56 per cent) and the Fraser Valley (16.94 per cent) posted the largest gains, followed by Greater Toronto (10.69 per cent).
Longer-term performance for these markets is off the charts. Greater Vancouver average home prices rose 20.56 per cent in the last year, 31.58 per cent over the last three years. For the GTA, the figures are 10.69 and 27.44 per cent, respectively.
4. HISTORY IS ON YOUR SIDE
If you've heard the adage, "Don't wait to buy real estate, buy real estate and wait," but aren't sure what it means exactly, read here.
While there are no guarantees, in short, real estate in Canada is a proven performer over time.
Sure, Vancouver and Toronto have shown the most spectacular historical growth, but even unsung markets in eastern Canada have performed well over time.
5. SPRING IS AROUND THE CORNER
Spring in real estate is typically "busy season." The warmer weather and longer days generally encourage more activity in the market. Those who were thinking of selling but delayed through the winter months might now throw up that "For Sale" sign.
Those looking to buy are similarly more enthused about getting out and looking around when the weather is nicer, and when, coincidentally, listings are usually higher.
Even on the new-home front, builders often use the spring season to launch new developments, and to add incentives for any remaining inventory in existing communities.

"Bubble" Concerns Elsewhere Further Raises Home Prices In Toronto

Business Briefing
Excerpted from The Globe and Mail

Toronto home prices soar as fears of ‘the B-word’ mount in Vancouver Add to ...

Michael Babad

The Globe and Mail

Published Friday, Jun. 03, 2016 7:08AM EDT

Last updated Friday, Jun. 03, 2016 11:41AM EDT

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Home prices surge

Here are three key numbers and two key words to ponder today:

17.5

37

1

B-word

---

Parabolic

---

The first stat represents the annual surge in the MLS price of a detached Toronto home, released today.

The second is the rise in the benchmark price for a detached house in Vancouver.

The third: Canada’s housing market compared to others, as in “We’re No. 1.”

The first key word represents “bubble,” with BMO Nesbitt Burns questioning if that’s the right description for Vancouver.

And the second is how BMO sees Vancouver prices.

All of this, of course, comes amid mounting concerns over the frothy Toronto and Vancouver real estate markets, with both Bank of Nova Scotia and the Organization for Economic Co-operation and Development calling this week for government intervention.

First, Toronto: Numbers released this morning showed home sales in the Toronto area climbed 10.6 per cent in May from a year earlier.

But the rise in sales pales in comparison to the gain in prices, according to the statistics from the Toronto Real Estate Board.

The cost of a detached home, as measured by the MLS home price index, surged 17.5 per cent. In the city core, the MLS price for a detached stands at almost $1.3-million. In the surrounding regions, it’s almost $900,000.

And a couple of additional stats: New listings fell 6.4 per cent, and active listings a hefty 30.4 per cent.

“While the record number of home sales through the first five months of 2016 is not necessarily surprising, it does sometimes mask the larger story in the GTA: the shortage of listings, which has resulted in strong upward pressure on home prices,” TREB president Mark McLean said in announcing the numbers today.

As The Globe and Mail’s Brent Jang reports, Vancouver’s market is also scorching.

More so than Toronto’s, in fact, which prompted BMO senior economist Robert Kavcic to point to the phenomenon we dare not name.

And he didn’t, choosing instead to question whether the city is exhibiting signs of “the B-word.” By which, of course, he meant bubble.

Numbers released yesterday showed Vancouver sales climbing 17.6 per cent, with the benchmark price soaring 29.7 per cent from a year earlier.

And then there’s the growth in a detached home: 37 per cent.

“Price growth started to go parabolic in early 2015 after oil prices went off the rails and the Bank of Canada cut rates,” Mr. Kavcic said in a research note, reminding clients that BMO warned then of surging prices in Vancouver and Toronto.

“Two past episodes in Canada that most would associate with the B-word - Calgary in 2006 and Toronto in the late ‘80s - saw price growth push through 40 per cent year over year,” he added.

“We know for sure both of those episodes ended poorly.”

According to new measures released yesterday by Bank of Nova Scotia, the rise in real home prices in Canada is tops in the world, followed by Sweden, Colombia, Ireland, Britain, Australia, Mexico, the U.S. and Germany.

The Millennials have not given up on Home Ownership and fight they will!

No matter how much money you have to save for a down payment, buying a house is the easy part. It’s much harder to afford the endless financial demands of home ownership and find money for your other goals and obligations. (DARRYL DYCK For The Globe and Mail)

Rob Carrick

Excerpted from The Globe and Mail

Fear of missing out leaves millennials taking on big risk in housing market

ROB CARRICK

The Globe and Mail

Published Thursday, Apr. 28, 2016 7:14PM EDT

Last updated Sunday, May 01, 2016 10:39PM EDT

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Gen Y’s fear of missing out on home ownership is right on the money.

Month by month, affordability in the country’s hot markets is slipping away. Every year a first-time buyer waits could end up costing many thousands of dollars as higher prices flow through to bigger mortgage payments.

The average price of a home in Toronto increased to $688,181 at the end of March from $613,933 a year earlier, data from the Canadian Real Estate Association shows. That’s enough to increase the payments on a five-year mortgage at 2.59 per cent by $310 per month, or $18,600 in total over five years. In Vancouver, price increases over the same timespan result in extra mortgage costs of $616 per month and $36,960 over five years (assuming a 10 per cent down payment).

A recent survey from Toronto-Dominion Bank found that 19 per cent of Toronto and Vancouver home owners mentioned a fear of missing out – FOMO, as it’s known on social media – as a top consideration in buying their first home. FOMO is a totally understandable emotion in our housing-obsessed society, and it’s justified by the fundamentals in the hottest markets. Guaranteed, we’re going to see more FOMO home buying. By necessity, a lot of it will only happen with parental financial help.

Let’s understand what we’re getting into here. Almost everyone who ever bought a home thought he or she was making a leap into the unknown. But today’s millennial FOMO buyers are taking on unprecedented levels of risk.

They will have to devote a high proportion of their household earnings to housing costs compared to previous generations, while bearing extra responsibility to save for retirement. Compared to the baby boom generations, fewer millennials will work in jobs with company pensions.

Today’s first-time buyers must also adjust to a slow-growth economy and its impact on the steady year-by-year increase in prosperity we’ve come to expect. It’s best to plan for economic serendipity – bonuses, raises, promotions – to be a rarer occurrence than in previous eras.

A weak economy is keeping interest rates low, and that should continue for a while yet. But if you buy a house today with a 25-year amortization, you have to be prepared for at least modestly higher borrowing costs along the way. People who bought in the 1980s and early 1990s had to contend with shockingly high interest rates, but they got to renew at steadily lower rates over time. The only way we will get lower rates than we have today is if the economy implodes.

Something we’ll call “location risk” must also be considered by FOMO buyers. Houses in suburbia and beyond offer more affordable mortgage payments, but also grinding and expensive commutes that can degrade your quality of life. Other FOMO risks present themselves in the buying process – getting caught up in bidding wars that can only be won with expensive bully offers and waiving sensible conditions in purchase offers like a home inspection. If you’re stretching your finances to the limit in buying, you need every advantage possible in knowing your house’s weak spots.

Emotionally, there’s an additional risk in the form of a possible correction in house prices. If you buy a house today and commit to staying 10-plus years, price declines in the next few years likely won’t mean much in the long run. But in the near term, things could get stressful at home if your FOMO purchase is followed by a market decline.

FOMO buying is a high-risk proposition, but you can’t deny the logic. While some housing markets across the country remain affordable, Toronto, Vancouver and nearby cities are running away from first-time buyers. Few people will discuss this by-product of hot housing. Too many still operate on the idea that buying a first house is always a stretch, but nothing insurmountable if you save diligently and buy sensibly.

The FOMO narrative undersells the damage done by hot markets. Young people aren’t missing out – they’re being incrementally squeezed out by price increases that make mortgages more expensive to carry. Unless millennials work in lucrative jobs or have parents who do, ownership is a struggle some won’t win without compromises like living far from work or sharing a house with friends or family.

Those who do get into the housing market today could be the most precarious generation of buyers ever. All the easy money’s been made in housing, while the risks of owning multiply.

Home Prices Rise As Listings Sink!

Prices surge, listings sink: Average detached Toronto home nears $1.2-million

Michael Babad

The Globe and Mail

Published Tuesday, Apr. 05, 2016 7:00AM EDT

Last updated Tuesday, Apr. 05, 2016 1:38PM EDT

Excerpted from The Globe and Mail

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Home prices surge

The average price of a detached house in Toronto is nearing the $1.2-million mark.

Across the Greater Toronto Area, according to statistics released today, average prices for all types of homes surged 12.1 per cent in March from a year earlier, bringing first-quarter gains to 13.6 per cent.

The MLS home price index, considered a better gauge, rose 11.6 per cent in March, the Toronto Real Estate Board said.

The numbers come amid growing concern that the Toronto and Vancouver housing markets appear frothy, and recent statistics showing mounting household debt, particularly on the mortgage side.

At the same time, though, some observers say that the pace of both employment and household formation in Toronto should ease those fears.

Affordability is clearly an issue, with bidding wars and fewer listings driving prices ever higher.

“Demand was clearly not an issue in the first three months of 2016, regardless of the housing market segment being considered,” Jason Mercer, the group’s director of market analysis, said in unveiling the March numbers.

“The supply of listings, however, continued to aggravate many would-be home buyers,” he added.

“We could have experienced even stronger sales growth were not for the constrained supply of listings, especially in the low-rise market segments. The resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year.”

Indeed, new listings across the area fell in March by 3.7 per cent, and active listings by a sharp 20.7 per cent. Sales surged 16.2 per cent in the month, and 15.8 per cent in the quarter.

The average price of a detached home now stands at $910,375.

It differs across the greater area, of course.

In the 416 telephone area code region, the average price of a detached home is now $1.17-million, while that in the 905 is $837,217.

Is the March mini-boom in real estate true or is it a myth?

In a few more days it will be March 2016 and you probably have heard of something commonly called the March mini-boom. Read more-



The above chart shows the average Home Resale Prices for 2012-2015 or 4 years and you will note that the upward trend in prices more distinctly starts in March. Click picture to enlarge.

Last year a listing in the $500K range that was put in the market towards the end of May instead of March would have gotten the seller $40K more if the seller opted to put it in the market earlier as he lost the momentum of the upward trend in prices. Contact Alex for questions 416 8875193.

GTA Home Sales Again At Record-Breaking Pace With No sign Of Ending!

Toronto Star

Business

GTA real estate sales hit record high in February

Excerpted from The Toronto Star

The Toronto Real Estate Board says there were 7,621 sales in February, up from 6,294, an increase of 21.1 per cent.

Darren Calabrese / CP

The Toronto Real Estate Board says that 2015 was a record sales year for its members, with 101,299 sales through TREB realtors through the year.

By: The Canadian Press, Published on Thu Mar 03 2016

Real estate sales in the Greater Toronto Area hit a record high last month, even after accounting for the extra day because of the leap year.

The Toronto Real Estate Board says there were 7,621 sales in February, up from 6,294, an increase of 21.1 per cent.

About two-thirds of the sales were outside the city of Toronto, itself, where there were 2,809 sales, an increase from 2,352 in the same month last year.

Average prices were also up, hitting $719,843 in Toronto, itself, and $665,100 in the rest of the GTA.

Toronto and other parts of the real estate market in southern Ontario were among the hottest in Canada last year, trailing only Vancouver and parts of B.C.’s Lower Mainland region.

Vancouver’s realtors announced Wednesday that sales in that city also set a record in February, with 4,172 homes sold, up 36 per cent from the same month last year.

Realtor Royal LePage says it expects Canada’s real estate market to slow this year due to eroding affordability in Toronto and Vancouver and the fallout from declining oil prices in Western Canada.

In its latest report, the realtor says the average price of a Canadian home increased 6.5 per cent to $500,688 in the fourth quarter of last year, compared to the same period on 2014.

The average cost of a two-storey home nationwide climbed to $610,134 in the quarter, up nearly eight per cent compared with the previous year.

The price of a bungalow rose 5.4 per cent year-over-year to $420,082, while the average price of a condo grew 3.1 per cent to $341,448.

Royal LePage says it expects the average cost of a Canadian home to rise by a more moderate 4.1 per cent over the course of 2016.

Where is the hottest real estate in the GTA? East end or west? Find out!

Toronto Star

Business / Real Estate

Excerpted from The Toronto Star               

Toronto’s east end has the hottest real estate in the city

Homes north of Danforth Ave. and east of the Don has the shortest sale times in Toronto, according to TREB data.

Linda Ing-Gilbert

106 Woodmount Ave. sold for $681,700 after just six days on the market. The asking price for the three-bedroom semi-detached home was $599,900.

By: Robin Levinson King Staff Reporter, Published on Wed Feb 03 2016

The trendiest neighbourhoods in Toronto aren’t in the trendy west end, but the east.

Homes north of Danforth Ave. and east of the Don River are selling fast, according to data provided by the Toronto Real Estate Board. The area, which encompasses posh Playter Estates to the west and rough-around-the edges Woodbine-Lumsden further east, boasts the shortest sale times in the city, with homes averaging a mere 12 days on the market compared to a city-wide average of 21 days.

To the south, Leslieville, Riverside and Riverdale came a close second, with homes averaging 13 days on the market.

Over the past decade, sale times across the city have been declining despite soaring home prices.

The median price of a Toronto home — stand-alone houses and condos combined — was $643,145 in 2015, compared to about $341,450 in 2005.

Yet in 2015, homes typically spent 21 days on the market, down 10 days from 2005 when they took a full month to sell. It’s a trend that has touched almost every corner of the city. The only areas that did not see a decrease in sale time were neighbourhoods around the Annex, Casa Loma and Wychwood.

Toronto realtor Desmond Brown said that low interest rates and population growth mean that there are more buyers than available homes, so most properties get snapped up fast.

“I think it’s basic supply and demand,” he said. “Good inventory is at a premium.”

That’s great news for sellers, especially for those north of the Danforth who bought at a low price and can now reap the benefits of a decade’s gentrification. Over the past ten years, the median value of homes north of the Danforth has increased 132 per cent, from $288,500 in 2005 to $608,500 in 2015.

“We’ve seen higher prices there, or even bidding wars, because it’s about supply,” said real-estate agent Linda Ing-Gilbert.

A recent listing, a three-bedroom semi at 106 Woodmount Ave., sold in six days for $681,700, more than $80,000 over asking. Ing-Gilbert, who grew up around the Danforth, said the area is often the last refuge for affordable family homes for many in the city.

Most of the bidders for the home west of Woodbine Ave. were first-time home buyers, she said, or young couples looking to upgrade from a condo.

“I think every single woman was pregnant,” Ing-Gilbert said.

Many start out hoping to buy in the more trendy west end, Ing-Gilbert said, but soon come to realize you can get the same amenities — access to the subway, schools and good restaurants — for about 10 per cent less in the east.

But there’s a price to pay for affordability, and that’s popularity, said Brown. Everybody loves a bargain, which means it can take buyers a few tries to land an east-end starter home.

Conversely, homes in neighbourhoods like the Annex can take a bit longer to unload.

“It’s a simple explanation — there aren’t as many buyers for the high-end properties,” he said.

New Mortgage Rules Now In Effect! - 5 Things To Know!

New mortgage rules kick in

Alexandra Posadzki, THE CANADIAN PRESS

First posted: Monday, February 15, 2016 12:13 PM EST | Updated: Monday, February 15, 2016 02:49 PM EST 

Excerpted from The Toronto Sun

(Fotolia)

TORONTO -- Canadians looking to buy homes between $500,000 and $1 million will have to put down larger down payments as new federal rules took effect Monday.
Under the changes, homebuyers must now put at least 10% down on the portion of a home that costs more than $500,000.
Buyers can still put down 5% on the first $500,000 of a home purchase. Homes that cost more than $1 million still require a 20% down payment.
Phil Soper, president and CEO of Royal LePage, says the new rules aim to slow the breakneck pace of price growth in the red-hot markets of Toronto and Vancouver without affecting markets that are lagging, such as those in oil-dependent provinces.
"The problem with monetary policy is that it impacts the struggling Calgary market or the just fine Winnipeg market and the overheated Vancouver market in equal amounts," Soper said.
"If you lower interest rates, you lower interest rates for all. And that's not what the country needed. This change ... is the first attempt to recognize the fact that some parts of the country are in need of a mild tap on the break, while other parts of the country really need to continue to receive stimulus."
When the new rules were announced in December, Finance Minister Bill Morneau said he estimated they would affect about 1% of the overall real estate market. Some industry observers predicted a surge in sales activity as homebuyers would look to pre-empt bigger down payment requirements.
Soper says real estate markets in Ontario, B.C. and Quebec have been "boisterous" in the first five weeks of the year -- but he says it's unlikely that the new mortgage rules are responsible.
"I think it has much more to do with clean sidewalks from a mild winter and low mortgage rates than it does with impending changes that tweak mortgage insurance regulations," Soper said.
"It's just not a big enough change to have materially impacted home sales volumes in the country."
Ottawa tightened rules for new insurable loans four times between 2008 and 2012, including upping the minimum down payment to 5% and reducing the maximum amortization period in stages to 25 years from 40 years.
FIVE THINGS TO KNOW ABOUT THE NEW MORTGAGE RULES
Cough up the cash: Homebuyers now have to put at least a down payment of 10% on the portion of the price of a home over $500,000. For anyone buying a home for $700,000 -- a common list price in Vancouver and Toronto -- that means the minimum down payment will rise to $45,000 from $35,000. Any home under $500,000 still requires only a down payment of 5%.
Who's affected: Primarily those shopping for a home in Toronto and Vancouver. First-time buyers in those cities will feel the pinch since they'll be required to put down bigger down payments to get into the market. Those selling their homes in order to size up, especially in cities with hot housing markets, likely won't feel the pain since they've built up equity in those properties.
Impact: The influence the new rules will have over house prices is expected to be small, experts say, given their narrow reach. When he announced the changes in December, Finance Minister Bill Morneau said they are expected to affect 1% or less of the real estate market.
Sales activity: Some analysts expected a surge in sales leading up to Monday's changes, saying they would lure homebuyers who wanted to avoid making the bigger down payments. Royal LePage CEO Phil Soper says sales activity has been "boisterous" in Ontario, B.C. and Quebec in the first five weeks of this year, but he credits a relatively mild winter and low mortgage rates.
Past measures: Four rounds of changes were made to tighten eligibility rules for new insurable loans between 2008 and 2012. Among them: the minimum down payment was increased to 5%, the maximum amortization period was reduced in stages to 25 years from 40 years and the maximum insurable house price was limited to below $1 million.